Could providing a reference soon become mandatory?

Currently there is no statutory obligation for employers to provide a reference for an employee (1) (with the exception of certain regulated sectors) – but this could be set to change.

At the end of last month, the Government announced a consultation into the proposal that employers should be required to, at a minimum, provide a basic reference (2). An example of this would be employers merely confirming that the individual worked for them and during which time period (2).

This is in response to recommendations from the Women and Equalities Select Committee’s inquiry into the use of NDAs in discrimination cases (we’re still waiting for legislation on that one by the way), with the Government acknowledging that withholding a reference could pose problems for victims of discrimination (1). They have also recognised ‘concerns of blacklisting by potential future employers’, and are committed to ‘exploring what potential safeguards might be appropriate where employment tribunal judgements are published’ (1).

Employment Law expert, Jon Fisher, also reflects on what the Government have made clear they are not in favour of:

  1. A new legal requirement on employers to investigate all discrimination and harassment complaints regardless of whether a settlement is reached– although they did note that employers should do this, and the Equality and Human Rights Commission guidance expects this – so it’s not as clear cut
  2. A requirement for a company director to oversee aspects of NDAs and harassment policies as proposed by the Commission– it prefers the whole company board to take responsibility
  3. A new criminal offence of proposing a confidentiality clause designed or intended to prevent or limit the making of a protected disclosure or disclosure of a criminal offence– but they will look at this again if the reforms are ineffective so keep an eye out (2).

The response to mandatory references is mixed. Whilst designed to support and protect employees, employers have said they don’t necessarily want mandatory laws but would welcome guidance around how they are exactly supposed to respond to a reference request, given that many struggle with the process (1). Frequently asked questions include what to include, what not to disclose and if there is any information they are obliged to share with prospective employers. Pinsent Mason’s Andrew Kane advises that, with the exception of some regulated sectors, normally there is no obligation to disclose information such as whether an employee was performance managed or dismissed for misconduct for example (1). But the prospect of just providing a basic factual reference as in the example above, could help to remove doubt over what to include.

My advice? Keep an eye on this one. If it does make it through it will impact both HR and payroll professionals in their role as line managers and I have a feeling this is not the last we’ll see of this. But it won’t be for a while, we’ve got Purdah, an abandoned Finance Bill and a delayed Budget to get through first!

If you’re not aware what Purdah is, it’s the requirement that once parliament is dissolved civil servants must withdraw from any meetings or contact with the outside world (even by email). They cannot be seen to be outlining or commenting on government policy when there is no government in place as civil servants must be a-political.

This is particularly problematic for our profession as we have no clarity as to what we will be delivering next April. We might even have a retrospective Finance Act that backdates the legal powers to collect income tax from 6th April 2020. If you think about the timeline it’s tricky…. even if the government is formed quickly with no horse-trading we won’t have a Budget until January and then the ensuing Finance Bill which needs scrutiny of both houses to become an Act. It does of course need to also contain the small matter of all the IR35 legislation and the company car tax changes if both are to go ahead from April 2020 as the previous government was committed to. The Scottish and Welsh governments also need to reflect the Westminster budget by holding their own budgets, and until that has happened (and being minority governments they too have to work hard to get their budgets through) we won’t know what the Welsh and Scottish tax rates are for April 2020. Who would be a payroll software developer at the moment, let alone an employer!